Abstract
<p>This paper presents a novel model of financial wellbeing grounded in the principles of Positive Economic Psychology, an emerging interdisciplinary field that integrates insights from Positive Psychology and Economic Psychology to promote economic prosperity and optimal economic functioning in individuals, groups, and institutions. The proposed model is grounded in two theories: Hope Theory and the Transtheoretical Model of Behaviour Change. It positions financial wellbeing as a hierarchical construct that offers pathways to financial wellbeing. At its foundation are individuals’ dispositions and financial outlooks, which provide the bedrock for financial growth. The second tier concerns financial literacy and skills, which are essential for informed financial decision-making and the maximisation of opportunities. These underpin the third tier: decisions and planning. The fourth tier refers to social context and social responsibility guiding principles that influences financial decisions and behaviours. The fifth tier includes financial behaviours, representing the application of a positive mindset, effective knowledge, skills and decisions towards achieving and maintaining financial wellbeing. At the top of the hierarchy are accomplishments, representing the ultimate expression and outcomes of effective financial behaviours. This final tier centres on the attainment of financial goals and the achievement of a secure and satisfying financial state. Situated outside the hierarchy are contextual and sociodemographic factors that can influence each tier and should be considered at every stage in the pursuit of financial wellbeing. The paper also reviews other models of financial wellbeing as well as the research evidence supporting the model.</p>